Weavering boss Magnus Peterson committed fraud

Directors of failed hedge fund Weavering Capital have been ordered to pay
$450m after they were found to have committed fraud in the months leading up
to its collapse.

The decision comes just months after the Serious Fraud Office dropped a parallel investigation into the company. Lawyers representing investors in the fund said they would now be calling on the SFO to reopen its case against Mr Peterson.Photo: Alamy

Defendants including Magnus Peterson, founder of Weavering, were found to have manipulated figures and misled investors in the London-based fund.

A US judge overseeing a civil case against Mr Peterson said his explanations for what went wrong were “not credible”.

The decision comes just months after the Serious Fraud Office dropped a parallel investigation into the company.

Lawyers representing investors in the fund said they would now be calling on the SFO to reopen its case against Mr Peterson.

Mrs Justice Proudman said: “I do not accept Mr Peterson’s assertions that the investors understood his strategy very well at the time. He cannot show any document in which he explained it. In all the circumstances it is my view that these swaps were never intended to be enforceable instruments.”

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The key allegation made against Mr Peterson and fellow defendants including his wife Amanda Peterson and Chas Dabhia and Edward Platt was that the company entered into “sham” transactions purported to be on interest rate swaps.

The $637m trade was carried out with an offshore company linked to Mr Peterson. Weavering collapsed shortly after the trade was uncovered in March 2009 leaving investors millions of dollars out of pocket.

Jones Day partner, Barnaby Stueck, representing the liquidators said: “Whilst Weavering Capital’s investors are pleased with Mrs Justice Proudman’s findings. They will be asking the Serious Fraud Office to reconsider its decision not to proceed with the criminal investigation given these very clear findings.”